Federal Budget 2024-25 Analysis

 

Treasurer Jim Chalmers’ 2024 Federal Budget aims to curb inflation sooner than expected, ease current cost-of-living pressures, and strengthen the economy long-term, with over $8.4 billion allocated for immediate relief measures, tax cuts, and student debt waivers. Additionally, nearly $83 billion will be invested in housing, infrastructure, health, and initiatives to create a resilient economy ahead of the upcoming federal election.

Click here for the full summary and what it means for you.

Roses are red, Violets are blue. It’s so romantic, talking money with you.

 

Money can be a contentious topic in any relationship. Yet, its significance cannot be understated. Among the myriad of issues that couples navigate, financial matters often rank high in terms of importance and potential conflict. Despite its sensitivity, discussing finances openly and honestly with your partner is not only crucial but can also strengthen the bond between you. Let’s delve into why this conversation is so essential.

 

  1. Establishing Trust and Transparency:

Open communication about finances builds trust and transparency within a relationship. Sharing details about income, debts, savings, and financial goals demonstrates a willingness to be vulnerable and honest with your partner. It lays the foundation for a strong and secure partnership where both parties feel valued and respected.

 

  1. Aligning Goals and Priorities:

Money touches every aspect of our lives, from daily expenses to long-term aspirations. By discussing finances, couples can ensure that they are on the same page regarding their goals and priorities. Whether it’s saving for a house, planning for retirement, or budgeting for vacations, having these conversations allows partners to align their visions for the future and work together towards common objectives.

 

  1. Resolving Conflicts and Reducing Stress:

Financial disagreements are a leading cause of relationship stress and conflict. However, avoiding these discussions only exacerbates the problem. By addressing financial issues head-on, couples can identify potential sources of tension and work towards mutually beneficial solutions. Whether it’s creating a budget, renegotiating spending habits, or seeking professional advice, proactive communication can alleviate stress and prevent conflicts from escalating.

 

  1. Building a Strong Financial Foundation:

Successful financial planning requires teamwork. When couples openly discuss their finances, they can leverage each other’s strengths and expertise to build a strong financial foundation. Whether one partner is more knowledgeable about investments or budgeting, pooling resources and working together allows couples to make informed decisions that benefit both parties in the long run.

 

  1. Navigating Life’s Transitions:

Life is full of unexpected twists and turns, many of which have financial implications. Whether it’s job loss, illness, or a new addition to the family, discussing finances prepares couples to navigate these transitions together. By planning for contingencies and having open conversations about financial priorities, couples can weather life’s storms with greater resilience and unity.

 

  1. Cultivating Intimacy and Connection:

While discussing finances may seem mundane, it can actually deepen intimacy and connection within a relationship. Sharing financial goals, dreams, and fears fosters a sense of intimacy and understanding between partners. It requires vulnerability and trust, which are essential components of any healthy relationship.

 

  1. Strengthening Commitment:

Finally, discussing finances reaffirms a couple’s commitment to each other and their shared future. It signals a willingness to face challenges together and work towards common goals. By openly discussing finances, couples demonstrate their commitment to building a strong and enduring partnership built on trust, communication, and mutual support.

 

In conclusion, discussing finances with your partner is not just about money—it’s about building a strong and resilient relationship. By fostering trust, aligning goals, resolving conflicts, and cultivating intimacy, couples can navigate the complexities of financial management together. So, don’t shy away from these conversations. Embrace them as an opportunity to strengthen your bond and lay the groundwork for a secure and prosperous future together.

 

If you are ready to discuss your financial future get in contact with one of our Advisers today by giving us a call on (03) 5229 0577.

 

The advice on this site is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

Retirement planning for small business owners

 

When you run your own business a good retirement plan can bring real peace of mind. Read more about your options – and why it’s never too early to start.

PLANNING YOUR RETIREMENT

When you’re busy running your own business retiring could be the last thing on your mind. But planning your retirement well in advance can make it easier to enjoy the future you want.

WILL YOU SELL YOUR BUSINESS?

Many business owners plan to sell their business to fund their retirement – but it’s important to be realistic. It isn’t always easy to find a buyer who’s prepared to pay the price you want, particularly if you’re hoping for a quick sale. And, even if you intend to keep on working well beyond retirement age, unforeseen circumstances such as poor health or a change in market conditions could force your hand, so it’s important to be prepared.

ALLOW PLENTY OF TIME

If possible, you should give yourself at least three years to plan for the sale of your business. Most buyers will want to see three years of financial statements and you’ll also need time to work on increasing the value of your business. This could include everything from keeping your equipment up to date and making sure your premises are always clean and well-maintained to boosting your sales with a strong online presence. Remember that a buyer is investing in the future of the business so they’ll want to see positive yet realistic forecasts.

In the meantime, it’s also important to protect your business with the right insurance. Appropriate Income Protection, Total and Permanent Disability (TPD), Trauma and Business Expenses insurance can help prevent debt from accumulating if you’re unable to work and enable you to pay someone to keep your business up and running if you can’t.

SUCCESSION PLANNING

Passing your business on to a family member or employee may sound straightforward but, again, you should allow plenty of time to work through the process and clarify all the details. For example, do you intend to retain any interest in the business? Who will own any property, such as the business premises? And, if your successor plans to buy the business from you, can you be sure they’ll have access to the money when you want it?

A good succession plan will cover all this and more to ensure you can make the transition with minimum disruption and maximum benefit. And it’s important to talk to a professional adviser about how you can best structure your business to protect your assets and minimise tax.

SAVING MONEY FOR RETIREMENT

Personal superannuation isn’t compulsory for small business owners so you might be tempted to put investing in your business ahead of your savings. This can be risky as there’s no guarantee your business alone will provide enough money for you to live comfortably in retirement.

Building your business and your superannuation investment simultaneously can help to mitigate the risk. Many business owners choose a self-managed superannuation fund (SMSF) as this may provide benefits such as a lower tax rate, more investment options and flexibility when it comes to drawing an income. However, a SMSF isn’t right for everyone so you need to discuss your strategy with a professional adviser.

PLANNING TO LIVE LONGER

In general, Australians are living longer, which means you could spend decades in retirement. Ideally, you’ll have enough savings to cover your expenses well into your nineties.

Financial security in retirement could underpin many of the decisions you make about your business so it’s important to think about the lifestyle you want. As a general rule, if you own your own home, you’ll need 70-80 per cent of your pre-retirement income to maintain the same standard of living. The age pension and other government supplements provide a safety net but, at the moment, these are set at about 28 per cent of the average wage, and this is very unlikely to increase.

The most successful retirement planning is long term. Your spending and your needs are sure to change as your retirement progresses so your plan must be adaptable enough to evolve. And it’s never too early to take action. Once you have your retirement goal in mind you can work out the steps that will help you take control of your retirement and enjoy the lifestyle you want.

 

Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/business/small-business/moments/future/planning
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
© 2023 National Australia Bank Limited (“”NAB””). All rights reserved.
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Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

July Newsletter 2023

 

Our July newsletter has just landed in your inbox. In it you will find a summary of the super changes that have come into effect this new financial year, we share the warm welcome of the newest mini member to the Income Solutions family and have some tips on managing the cost of raising children as the cost of living continues to spiral.

Have a read here

June Newsletter 2023

 

As we welcome winter and approach the end of the financial year it is the perfect time to get your financial affairs in order. It is a great time to set yourself up for success in the new financial year and reassess your goals and budget.

In our June Newsletter you’ll find some strategies to get you started, along with some tips on transitioning into retirement and if a testamentary trust is right for you and your loved ones.

Read more

May Newsletter 2023

 

While we await the delivery of the Federal Budget by Treasurer Jim Chalmers on May 9, we are keeping our eyes on the cash rate decision from the Reserve Bank of Australia which many predict will be another pause.

In our latest newsletter we explore how an emergency fund delivers peace of mind, May’s market movements and resident superstar Ash Irwin talks about credit scores.

Click here to read more

It turns out Millennials are financially savvy after all…

A recent University of Sydney study has explored the myth around Millennials being a group of indulgent spenders who sacrifice their ability to save towards purchasing their first home because they cannot go without their smashed avo on toast.

Researchers at The University of Sydney have completed a research project titled “Pathways to home ownership in an age of uncertainty”, undertaken for the Australian Housing and Urban Research Institute (AHUIR).  The research examines how young householders aged 25-34 in Sydney and Perth are adapting their living arrangements, spending and saving behaviours to be able to buy a home.

Traditionally, people in the 25 to 34 age bracket would be ready to purchase, or have already purchased, their first home.  The study found that approximately 40% of respondents in Sydney and 47% in Perth have already become homeowners.  When comparing the current Millenials against Generation X, recorded at 62% and Baby Boomers, recorded at 66%, you can see that home ownership is not being achieved at the same level it has in the past.

Furthermore, the survey provided financial diaries to 20 households to explore the complexities of spending and saving habits within this age bracket.  Dr Troy, Senior Lecturer in Urbanism at the Sydney School of Architecture, Design and Planning stated “The diaries confirmed that young adults are actively using strategies to support saving, such as minimising discretionary spending and paying ahead on utility bills.   They’re not spending much on eating out, entertainment or going on holidays, with the most common saving strategies being cooking at home – including relying on meals of 2-minute noodles! – and spending less on clothing and household items.  Instead, young adults are focused on paying reoccurring items such as food, petrol and debts, with the biggest challenges being the large, irregular, and often unexpected, expenditures such as car repairs and professional insurances”.

Acknowledging that past generations have also faced challenges, it is clear there will be a shift for the current, and likely future, generations in the way they grow and hold their wealth.  For some, a large percentage of their wealth may no longer be held within the family home.  While that idea may buck the long held thinking of older generations, this does not make the situation a doom and gloom forecast.  The positive message found in this survey is the level of financial goal setting and the display of dedication and discipline applied to build savings.  At Income Solutions, we believe the ability to set and achieve financial goals is paramount to building a financially secure future.  A financially secure future is achievable regardless of your home owner status, and the sooner you start, the greater the possibilities.  To understand more, request a copy of our Common Sense Investing webinar, or request an obligation free meeting with one of our Financial Advisers.

 

https://www.sydney.edu.au/news-opinion/news/2023/03/21/smashing-the-avocado-myth–cutting-brunch-won-t-pay-home-deposit.html

https://www.ahuri.edu.au/research/final-reports/395

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